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Monday July 09, 2012
Isis: Targeting muscular dystrophy
by John McCamant, editor The Medical Technology Stock Letter  Isis Pharmaceuticals (ISIS) has hit a string of new 52 week highs in recent weeks; we believe the main reason for the stock’s strength is most likely the recent deal with Biogen. ISIS continues to strike partnerships that leverage their very large pipeline and the partnerships keep coming earlier and earlier in the drug development cycle. The deal with Biogen requires ISIS to develop an antisense drug development candidate for the treatment of myotonic dystrophy type 1 (DM1), which is also known as Steinert disease. DM1 is the most common form of muscular dystrophy in adults, a genetic neuromuscular disease characterized by progressive muscle atrophy, weakness and disabling muscle spasms. ISIS’ DM1 antisense program is being developed to correct the underlying genetic defect that causes DM1. ISIS will receive an upfront payment of $12 million and is eligible to receive up to $59 million in milestone payments. Post-Phase II, ISIS could receive up to another $200 million in license fees and regulatory milestone payments. The program is in pre-clinical development, yet ISIS will still receive double digit royalties from any drug that makes it to the market from this collaboration. It is a very impressive deal that allows a company to retain a double digit royalty when the drug candidate has not even begun human testing. CNBC’s Jim Cramer touted the company a few weeks ago as being “immune to the current economic environment.” As new investors come into the biotech space, it appears that they are beginning to believe in ISIS’ technology and most importantly its ability to leverage the technology into partnerships that add to shareholder value. Isis continues to execute very well and is poised to maintain its momentum through the summer. We continue to rate the stock a buy on pullbacks to $12. Learn more about this financial newsletter at John McCamant's The Medical Technology Stock Letter. Related articles: 
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